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PETITIONER: RATNA SUGAR MILLS CO. LTD.

       Vs.

RESPONDENT: STATE OF U.P. AND OTHERS

DATE OF JUDGMENT07/04/1976

BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ GOSWAMI, P.K.

CITATION:  1976 AIR 1742            1976 SCR  (3)1062  1976 SCC  (3) 797

ACT:      U.P. Large  Land Holdings  Act, 1957,  S. 2(15) "land", scope of.

HEADNOTE:      The appellant  acquired some  land in district Jaunpur, for setting  up a factory, but did not use the land for such purpose. Under  the U.P.  Large Land  Holdings Act, 1957, he was required  to pay  holdings tax  for the assessment years 1365 to  1368 Fasli. The appellant’s application u/s. 143 of the U.P.  Zamindari Abolition  and  Land  Reforms  Act,  for treating his  land as  industrial land  was rejected  by the Sub-Divisional Officer.  On appeal,  the Collector  affirmed the order.  In  further  appeal  to  the  Commissioner,  the appellant succeeded  as regards  the  years  1365  and  1366 Fasli. The  State filed revision petitions. Subsequently the Commissioner held  that the  appellant  was  liable  to  pay holdings  tax  for  the  years  1367  and  1368  Fasli.  The appellant also preferred revision applications. The Board of Revenue decided  all the revision petitions in favour of the State, holding  that the appellant’s land  was "sirdari" and not bhumidari,  and it  could not  be meant  for  industrial purposes. The appellant’s petitions under Article 226 of the Constitution were  rejected by  a Single  Judge of  the High Court on the ground that the disputed land constituted "land as defined  in the  Act, and  that he  was liable to pay the tax. On  appeal,  the  Division  Bench  of  the  High  Court affirmed the order.      It was  contended before  this Court  that the  land is held for  industrial purposes,  and is not "land" under sec. 2(15) of the Act.      Dismissing the appeals, the Court, ^      HELD:  The  appellant  holds  the  land  as  a  sirdar. Permission to  use  the  land  in  question  for  industrial purposes was  not granted.  The word "lands" used in the Act is wide  enough to include all lands whether agricultural or not. The  appellant cannot  escape liability  for payment of holding tax  by keeping  the land  in question uncultivated. [1065-G, 1066C-D]      Raja Jagannath  Baksh Singh  v. State  of Uttar Pradesh and Another, [1963] 1 S.C.R. 220, referred to.

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JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeals Nos. 1076- 1079 of 1971.      Appeals by  special leave  from the  judgment and order dated the  8th January,  1970 of the Allahabad High Court in special appeals Nos. 965 to 968 of 1964.      V. M.  Tarkunde, E.C. Agarwala and Miss Manik Tarkunde, for the appellant.      G. N.  Dikshit, Shivapujan  Singh, advocate  for O.  P. Rana, for the respondents.      The Judgment of the Court was delivered by      KHANNA, J.-This  judgment would  dispose of  four civil appeals Nos.  1076 to  1079 of 1971 which have been filed by special leave by Ratna Sugar Mills Ltd. against the judgment of Allahabad  High Court affirming on appeal the decision of the learned single Judge 1063 whereby the  appellant’s four petitions under article 226 of the Constitution   of  India to  challenge the  order  dated December 18, 1963 of the Board of Revenue directing the levy of holding  tax under the U.P. Large Land Holdings Act, 1957 (U.P. Act  No. 31  of 1957)  (hereinafter referred to as the Act) on  the land  of the appellant for the assessment years 1365, 1366, 1367 and 1368 Fasli had been dismissed.      In 1951  the appellant  acquired land  measuring 277.08 acres situated  in village  Argupur Kalan,  tehsil Shahganj, district Jaunpur.  According to the appellant, the said land was acquired for the purpose of setting up a factory for the production of  paper and  pulp. A licence was granted to the appellant  in   that  connection.  The  appellant  filed  an application  under   section  143   of  the  U.P.  Zamindari Abolition  and  Land  Reforms  Act  for  treating  its  land situated in village Agrupur Kalan as industrial land. In the course of  those  proceedings,  the  Tahsildar  submitted  a report on August 24, 1959 as under:           "As  regards  Argupur  Kalan  the  whole  area  is      recorded as  sirdari of  Ratna Sugar Mills and they pay      Rs. 1495/-  as annual  land revenue.  It is recorded in      the Mills  from before  Zamindari Abolition  and  Mills      Authorities continue  to pay  the recorded land revenue      to Government.  The whole area is lying Banjir and lies      on both  the sides  of  the  railway  line  and  Belwai      Station.  It   has  not   at  all  been  brought  under      cultivation nor  the Mill  has derived any benefit from      it. It  is really meant for industrial purposes but due      to financial  difficulties, they  could not  use it  as      such."      The  Sub-Divisional   Officer,  however,  rejected  the application filed  on behalf  of the appellant under section 143 of  the U.P.  Zamindari Abolition  and Land Reforms Act. The result  was that  the  land  in  dispute  could  not  be declared to  be land for industrial purpose. Appeal filed by the  appellant  against  the  order  of  the  Sub-Divisional Officer was dismissed by the Collector.      While the  proceedings under  section 143  of the  U.P. Zamindari Abolition  and Land  Reforms Act were pending, the Commissioner held  for assessment  years 1365 and 1366 Fasli in an appeal filed by the appellant that the land in dispute was meant  for industrial  purposes and  had on that account remained uncultivated.  The appellant was held not liable to pay holdings  tax for the land in dispute for the assessment years 1365  and 1366  Fasli. Two revisions were filed by the

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State  against   the  above   order  of   the  Commissioner. Subsequently  for   the  years   1367  and  1368  Fasli  the Commissioner held  that the  appellant  was  liable  to  pay holdings tax  for the  land in  dispute under  the Act.  The appellant filed  two  revisions  to  the  Board  of  Revenue against that  order of the Commissioner. The four revisions, two filed  by the State and two filed by the appellant, were decided by  the Board  of Revenue  by a  common order  dated December 18,  1963. The  revisions filed  by the  State were accepted by  the Board,  while those  filed by the appellant were rejected. The 1064 Board held  that as  the land  held  by  the  appellant  was sirdari and  not Bhumidari land, it could not be declared to be meant  for industrial  purposes. The  appellant was  held liable to  pay holdings  tax for  the land in question. Four petitions  under   article  226  of  the  Constitution  were thereupon filed  by the  appellant to challenge the order of the Board of Revenue. The learned single Judge held that the land in  dispute constituted  land as defined in the Act and the appellant  was liable  to pay holdings tax for the same. The order of the learned single Judge, as already mentioned, was affirmed on appeal by the Division Bench.      Before dealing  with the  question  involved  in  these appeals, it  would be  appropriate to  refer to the relevant provisions as well as the objects and reasons.      The Act was published on November 1, 1957 but according to sub-section (3) of section 1, it was to be deemed to have come in force on the first day of July 1957. The objects and reasons which were mentioned in the Bill were as under:           "For securing  successful  implementation  of  the      Second Five  Year Plan,  it  has  become  necessary  to      augment the  revenues of  the State.  The  Agricultural      Income Tax  Act, which  was  enacted  at  a  time  when      zamindari system  was in  force, has become out of date      in the context of post war zamindari era. The principle      of social  justice enshrined  in our  Constitution also      demands that  disparities between  agricultural incomes      be reduced. More efficient exploitation of agricultural      lands is  essential for  increasing the food production      in the State. Those big holders who do not fulfil their      duty towards  society will  have to  sell up,  as  they      should, if  they fail  in making increased contribution      to the  exchequer in the form of holding tax under this      legislation.  With   these   objects   in   view,   the      Agricultural Income  Tax Act,  1948, is  being replaced      and this Bill is being introduced.           The Bill  seeks to  levy a holding tax on all land      holdings the annual value of which exceeds Rs. 3,600. A      cultivator who does not cultivate more than 30 acres of      land would  be exempt  from this  tax. The  Bill is  so      designed as  not to  affect the small cultivator. It is      proposed to  levy the  tax on a graduated scale so that      the larger  the holding,  the greater  the incidence of      the tax."      Section 3 of the Act is the charging section. According to sub-section  (1) of  that section,  there shall,  save as hereinafter provided,  be charged, levied and paid, for each agricultural year, on the annual value of each land holding, a tax  called the  holding tax at the rates specified in the Schedule provided  that no  such tax shall be charged on any land holding  the area whereof does not exceed thirty acres. Section 2(15) of the Act defines land as under:           "(15) ‘land’  means land, whether assessed to land      revenue or not, which is held or occupied for a purpose

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1065      connected  with   agriculture,   horticulture,   animal      husbandry, pisciculture or poultry farming and includes      uncultivated land held by a landholder as such": The definition  of land-holder is given in section 2(16) and the same reads as under:           "(16) ’land-holder’ means-           (i)  an intermediary,  where the  land is  in  his                personal  cultivation  or  is  held  as  sir,                khudkasht or grove, and           (ii) any other  person who  holds or occupies land                otherwise than as-                (a) an asami.                (b) a sub-tenant.                (c) a tenant of sir, or                (d) a sirtan.      and includes  a manager  or a principal officer, as the case may be:      Explanation-In this  clause asami  does not  include an asami of Gaon Samaj:" The Act  took the  place of the U.P. Agricultural Income Tax Act, 1948 which stood repealed in pursuance of section 28 of the Act  from the  date the Act came into force. It may also be pointed  out that  this Act  has been itself subsequently repealed by section 45 of the U.P. Imposition of Ceilings on Land-holdings Act, 1961 as from June 30, 1961.      In appeal  before us  Mr. Tarkunde  on  behalf  of  the appellant has  argued that  the land  in question  does  not constitute land  as defined  in section 2(15) of the Act and as such  the appellant  is not  liable to pay holding tax on the said  land. The  land  in  question,  according  to  the learned counsel, is held for industrial purposes and not for purposes of  agriculture,  horticulture,  animal  husbandry, pisciculture or  poultry farming. The above contentions have been controverted by Mr. Dikshit on behalf of the State and, in our opinion, the contentions are not well-founded.      The land  in dispute  is shown to be Banjar land in the revenue records. Although the appellant acquired the land in 1951 for  the purpose  of setting  up a factory, somehow the factory  could   not  be   set  up  and  the  land  remained uncultivated. The  appellant holds  the land  as a sirdr. An application was filed by the appellant for permission to use the land  in question  for  industrial  purposes,  but  that permission was  not granted, the order of the Sub-Divisional Officer in  this respect  was  affirmed  on  appeal  by  the Collector. A  sirdar under section 146 of the U.P. Zamindari Abolition and  Land  Reforms  Act,  has  the  right  to  the exclusive possession  of the land and entitled to use it for any purpose  connected  with  agriculture,  horticulture  or animal husbandry  which includes  pisciculture  and  poultry farming. It  is, therefore,  apparent that  after the  order which was 1066 made on the appellant’s application under section 143 of the U.P. Zamindari  Abolition and  Reforms  Act,  the  appellant cannot be  said to  hold the  land in dispute for industrial purpose. The  purpose for  which the  appellant could  after that date  use the  land was  agriculture,  horticulture  or animal husbandry including pisciculture and poultry farming. The fact  that the  appellant did  not cultivate the land in question would  not warrant  exemption from the liability to pay the  holding tax.  The definition of the "land" includes uncultivated land  held by  a land-holder  as such. The High Court held  that the  words "as such" did not pertain to the purpose for which the land is held but have reference to the

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land being  held by  the land  holder in  his capacity  as a landholder. We  see no sufficient ground to take a different view. In  any case  even if the words "as such" be construed to mean  that the  land should  be held  for the  purpose of agriculture, horticulture, animal husbandry, pisciculture or poultry farming,  the land  in question  should be  taken to satisfy  that   requirement,  because  those  are  the  only purposes for  which the  said land can now be used. The word "lands" used  in the  Act, as  mentioned in the case of Raja Jagannath Baksh  Singh v.  State of Uttar Pradesh & Anr., is wide enough  to include  all lands  whether agricultural  or not. The  object of the Act, as mentioned in the objects and reasons, is  more efficiency  exploitation  of  agricultural land for  increased food  production. The  appellant, in our opinion, cannot  escape liability for payment of holding tax by keeping the land in question uncultivated.      There is  no merit  in these  appeals and  the same are dismissed with costs. One hearing fee. M.R.                                      Appeals dismissed. 1067